3 Tips for Getting Cash for a Structured Settlement
A structured settlement is formed for those who have been involved in an accident and have been injured or left financially devastated. It is an agreement of payments necessary that is made between the person injured and the person responsible for that injury, in order to minimize the financial impact of the accident on both parties. But while receiving monthly payments may provide predictability for someone who has lost a stable work income, there will likely come a time when having a larger sum of money to work with would be more beneficial, perhaps to pay off a large debt or purchase a new house or vehicle.
Getting cash for a structured settlement is now no longer an uncommon occurrence. Structured settlement and annuity buyers abound on the Internet, touting their services as the "cheapest" or the "fastest" to do business with, and leading potential sellers into a maze that can take months to navigate through. Some sellers are discouraged by the apparent hassle of selling a settlement. They must follow a process, called factoring, that can take anywhere from 30 to 90 days to complete. But these three tips will make it easier for sellers to make it through the factoring process:
- Shop around. Don't agree to the first offer received. Not all buyers have a seller's best interest in mind. They have to make a profit too, whether it is through charging more for their services, or offering considerably less than the true value of the settlement. By comparing quotes, the seller can avoid dealings with an un-reputable or unstable company. Look for a company that has a good track record.
- Seek legal advice. It is never a wise idea to try to enter into a contract without professional legal advice. Lawyers are already familiar with the legal implications of selling a settlement, and they know what a fair selling price would be. In addition, since many states now require a court to approve the sale of a structured settlement, it can be doubly helpful to have a lawyer who can represent the seller's best interest.
- Do the math. Is it going to be worth cashing in part or all of a structured settlement? Cashing a settlement requires that the seller pay for the taxes on their lump sum. Also, by selling their structured settlement, a seller only receiving the current value of the annuity, not the future value which he/she may be entitled to.